fxtrader07

The Crude Oil Price Disconnect

just look at big oil's real exploration budgets over the past 30 years and look at the low per capita oil usage in Chindia and you know why oil will stay high and will go higher for years to come. it's all basic supply-demand arithmetics and what many people do not seem to grasp is that both is highly inelastic in the case of oil. others here have pointed out great facts about why all this talk of huge new oil supplies hitting the market is phony and that those supplies will at best serve to somewhat curb the price increase by offsetting some of the additional demand.
likewise, oil will probably decline at some point but not buntil huge technical innovations have been made to replace it as a source for fuel.
my chemistry teacher back in the 1980s told me that it was a crime and plain stupid to burn oil for heating and eletricity generation while it was so much more important for chemical products and all sorts of useful stuff.
that floor trader obviously hasn't seen at all the seismic shift in demand supply fundamentals that have occured over the past 10 years. floor traders don't always have a clue and when it comes to the Nymex, it is one of the worst exchanges out there. floor traders have a lot of options to make tons of money there on the back of investors, trust me, and they can do so without knowing a thing about oil, gas or gold...